Finmeccanica: the Board of Directors approves the Half-Year Financial Report at 30 June 2013

Finmeccanica: the Board of Directors approves the Half-Year Financial Report at 30 June 2013

The Board of Directors of Finmeccanica, convened today under the chairmanship of Giovanni De Gennaro, has examined and unanimously approved the Half-Year Financial Report at 30 June 2013.

Comments on financial results (*)

Though considering that the results for the first six months are not fully representative of the performance of the entire financial year, as more than half of the business activities are concentrated in the second half-year, at 30 June 2013 the Group reported results in line with and, in some cases, better than the forecasts outlined in the budget for the period. The Aerospace and Defence business segment reported higher revenues and profits than the forecasts and as compared with the same period of 2012. Also the commercial performance was better than forecast although lower than in the first half of 2012. By contrast, Energy and Transportation showed a lower results.

EBITA increased (up by 2%) compared to first half of 2012, thanks to improvements throughout the Aerospace and Defence segment (with the exception of Selex ES) which were partially offset by the decrease in the Energy and Transportation segments that are still affected, particularly in the Vehicles business, by inefficiencies caused by production slowdowns and contractual charges and cost overruns on some programmes.

In the first half-year FOCF, though negative as traditional in this period, is better than expectations and came to a positive EUR 40 million in the second quarter. The net result was affected in particular by higher non-recurring costs connected to certain contracts, among which there are provisions made following recent events regarding high-speed train in Belgium, and higher costs under the Selex ES Reorganisation Plan.

The abovementioned results derive from the industrial reorganisation started in 2012, which allowed Alenia Aermacchi, DRS Technologies and Selex ES to start and carry on virtuous processes of reorganisation and relaunch.

In this context the Aeronautics segment showed a good performance with an increase of about 9% in new orders and of about 11% in revenues and a significant increase in EBITA equal to 25%. In particular, EBITA was positively affected by higher business volumes and benefits of renegotiating certain commercial agreements and also by the reduction in operating expenses and the improvement in efficiency as a result of the restructuring and reorganisation process underway. Similarly, in the Defence and Security Electronics business, DRS Technologies recorded results considerably higher than those outlined in the budget, which had positive effects on the profitability of the company. Selex ES, which has recently concluded an important trade-union agreement on the integration and reorganisation plan, is in the initial stage of the reorganisation process, the effects of which will be fully felt in the next financial years and will affect 2013 performance to a limited extent only.

The good results shown by Alenia Aermacchi, DRS Technologies and Selex ES arising from their reorganisation plans were not posted by AnsaldoBreda, which continues to be affected by significant losses connected to the production activity and to cost overruns on some specific programmes.